Real Estate

Fractional Ownership of a cottage

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  • Jun 25th, 2018 7:52 pm
[OP]
Jr. Member
Feb 16, 2010
133 posts
47 upvotes

Fractional Ownership of a cottage

Hello,
We are a couple with no kids, nearing 50 in age. Primary home mortgage balance is well under control and less than 5 years to pay-off. We also have another investment Condo townhouse.
Now, we are considering to buy a vacation cottage somewhere up in Muskoka.
This is new to us and we are also dreading weekly drive up North on weekends, in addition to the fact that we do not want to get tied up with the cottage as we would like to travel other places too.
We came across a couple of cottage offers in Bracebridge area for Fractional ownership of 5 weeks per year. We are considering to visit and get more details.
One of them is at a cost of $55,000 and another is a luxury cottage selling at over $140,000. If we cannot use all the 5 weeks, we can rent out. Yearly maintenance is ranging from $3000 to $5000.
Is there anyone currently under Fractional ownership of cottages? How has been the experience? Any pitfalls that we have to be careful about?
Would appreciate feedback. Thanks in advance.
13 replies
Deal Addict
Dec 28, 2008
1368 posts
150 upvotes
Toronto
Just rent a cottage for 1 to 2 weeks each year at this stage in your life.
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Jan 27, 2004
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T.O. Lotto Captain
philan wrote: Hello,
We are a couple with no kids, nearing 50 in age. Primary home mortgage balance is well under control and less than 5 years to pay-off. We also have another investment Condo townhouse.
Now, we are considering to buy a vacation cottage somewhere up in Muskoka.
This is new to us and we are also dreading weekly drive up North on weekends, in addition to the fact that we do not want to get tied up with the cottage as we would like to travel other places too.
We came across a couple of cottage offers in Bracebridge area for Fractional ownership of 5 weeks per year. We are considering to visit and get more details.
One of them is at a cost of $55,000 and another is a luxury cottage selling at over $140,000. If we cannot use all the 5 weeks, we can rent out. Yearly maintenance is ranging from $3000 to $5000.
Is there anyone currently under Fractional ownership of cottages? How has been the experience? Any pitfalls that we have to be careful about?
Would appreciate feedback. Thanks in advance.
BryceS wrote: Just rent a cottage for 1 to 2 weeks each year at this stage in your life.
YEah thats the thing..
You can rent a decent well equipped cottage for $1000 per week... If you want to be up north 5 weeks a year thats $5000 per year.

$55,000 cost / $5000

Thats 11 years of cottaging 5 weeks per year... IS that worth it?

Punch the numbers that way and see if its worth it to you compared to renting.

Also keep in mind the maintenance... You say $3000 on the low end.
You can rent nice cottages for 3 weeks @ that price.
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Aug 2, 2010
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Here 'n There
Yes. If you are only going to be able to use it a few weeks a year you might as well just rent and avoid the capital investment, not to mention not feel you have to use it during those few weeks you are allowed to. You can also rent different places at will. Why get tied down to one place for just a few weeks each year?
Deal Addict
Jul 29, 2006
4148 posts
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you're also not guaranteed to get 5 preferred weeks in the summer. What if you get 5 weeks in the dead of winter?
Member
Dec 21, 2010
274 posts
189 upvotes
Usually you will only get 1 week for prime summer time (Victoria day to Labour day). The rest will be shoulder season and some will be during dead winter.

I have a friend who has problem going to their "time slot" in February.
Deal Addict
Jan 15, 2017
4791 posts
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Ottawa
Is 5 weeks the norm? That would suggest to me at least 10 owners (5 was x 10 = 50 weeks per year). With10 people wanting peak summer weeks, someone is going to lose out. Don’t know what happens to the other two weeks.
Deal Fanatic
Mar 21, 2010
6479 posts
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Toronto
philan wrote: If we cannot use all the 5 weeks, we can rent out.
I would advise you to think about that a bit more, if that's your fallback (in the event that you don't want to go). Renting out isn't something that just happens, you have to deal with the potential that no one rents it, or that bad people rent it, and the time and money you spend even if either of those things happen. I would suggest that you assume that you can't rent it out, and make your decision based on that - it's a bonus if you can, but I personally wouldn't count on it being a simple thing.

If you're going to be paying close to $1,000 per week (as maintenance), in addition to your capital cost, in addition to maybe not using all your weeks but still having to pay - you could travel to many places for something similar, why limit yourself to just "up North" and the same place each time? If other people are using it 9 out of 10 weeks, it's no longer yours, and if it's no longer yours then it's no longer your cottage, so you might as well rent somewhere or just stay in a hotel anywhere in the world.
Deal Addict
Jul 29, 2006
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Manatus wrote: I would advise you to think about that a bit more, if that's your fallback (in the event that you don't want to go). Renting out isn't something that just happens, you have to deal with the potential that no one rents it, or that bad people rent it, and the time and money you spend even if either of those things happen. I would suggest that you assume that you can't rent it out, and make your decision based on that - it's a bonus if you can, but I personally wouldn't count on it being a simple thing.

If you're going to be paying close to $1,000 per week (as maintenance), in addition to your capital cost, in addition to maybe not using all your weeks but still having to pay - you could travel to many places for something similar, why limit yourself to just "up North" and the same place each time? If other people are using it 9 out of 10 weeks, it's no longer yours, and if it's no longer yours then it's no longer your cottage, so you might as well rent somewhere or just stay in a hotel anywhere in the world.
+1 the week's you're looking to rent out may not be during a time period where people would be looking to rent and that means no rent money coming in.
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Nov 28, 2016
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Out west
Just another thing to worry about and tie you down. Why bother, unless its a money hands over first opportunity, why bother with the hassle.

Some thing more to own, maintain and get rid of as you get older. Unless you plan on using it like half the year, sounds like something that will have a honeymoon phase, and then dread it

You already said the first sentence dreading the drive, think that will change.

Want to be there, rent for the week, then leave. No maintenance, no nothing. One you are gone, not your problem
Deal Guru
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Mar 31, 2008
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UrbanPoet wrote: YEah thats the thing..
You can rent a decent well equipped cottage for $1000 per week... If you want to be up north 5 weeks a year thats $5000 per year.

$55,000 cost / $5000

Thats 11 years of cottaging 5 weeks per year... IS that worth it?

Punch the numbers that way and see if its worth it to you compared to renting.

Also keep in mind the maintenance... You say $3000 on the low end.
You can rent nice cottages for 3 weeks @ that price.
Might get something small and quaint but nice in non-Muskoka for that amount. Summer time.. forget it. But agree. Better to rent. Find one cottage your really like and make that your normal rental. Great since you know you'll want it so can book early or work something out with the owners.
Member
May 7, 2016
483 posts
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Friends of mine did this. They have one week during prime summer time and the rest is during weeks that you would never want to go to Muskoka. Add the initial cost and the yearly fees and you are way better renting whatever you want, whenever you want.
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Mar 31, 2008
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carztoronto wrote: Friends of mine did this. They have one week during prime summer time and the rest is during weeks that you would never want to go to Muskoka. Add the initial cost and the yearly fees and you are way better renting whatever you want, whenever you want.
And for longer too if necessary. Why not 2 weeks?
[OP]
Jr. Member
Feb 16, 2010
133 posts
47 upvotes
Thanks everybody for helping us to make the right decision.
We have decided not to proceed with this. Much appreciated:)

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